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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]I am far from an expert on taxes. As a company, we do bonuses (like many) but we have one employee that complains about how much tax is taken out of his bonus(es). Is there anything we or he could/should do differently? I'd just come to terms many years ago that bonuses are taxed at a higher rate and that was that. Thoughts?[/quote]Bonuses are treated as supplemental income and taxed at a flate rate of 22% by the Fed. Depending on his tax bracket he may get a refund at the end of the year or end up owing more. It all comes out in the wash at the end of the year when you do your taxes. Nothing you can do about it besides increase base salary, which is great for the individual, but not something an employer will want to do as they carry that base into the next year.[/quote]

No, this is incorrect.  All income is [b]taxed the same.[/b]  Depending on how 'supplemental' income is paid, it may or may not be subject to a different [b]withholding rate.[/b]  The supplemental income withholding rate may be higher or lower than your ordinary income withholding rate, which could result in a tax refund or tax bill at the end of the year.  While you sort of get to the right answer at the end, you need to understand that withholding rates are not the same as tax rates.[/quote]

No, all income is not taxed the same, pp. I know what you are trying to say but this is wrong.

You mean wages, I believe. But that is subject to progressive marginal income tax rates, for starters.

Income from capital is subject to very different income tax rules than wages.

Partnership income similarly treated differently.

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